Which of the Following Is Likely to Occur When the U.S.dollar

question 34

Multiple Choice

Which of the following is likely to occur when the U.S.dollar is undervalued relative to the peso?

• A) There will be an excess supply of dollars at the pegged exchange rate in the foreign exchange market.
• B) The net exports of Mexico will increase.
• C) The demand for dollars in exchange for pesos will exceed the supply of dollars in exchange for pesos.
• D) The dollar will depreciate against the peso.

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